Xbox 360

NOTE: DO NOT BUY A USED XBOX 360! Way too many smart gamers have figured out ways to sell RRoD'd Xbox 360s to retailers, who then pass them on to unwitting consumers. It will be a HUGE hassle for you. Buy a new Xbox 360 with the warranty that Microsoft gives to new console users and you will be much less likely to deal with a serious hardware failure.

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Pros

Xbox Live

The online services that Xbox offers are vast. Players can download games directly to their hard drive, get DLC (see Definitions), download music and movies (legally), and even watch some steaming television channels.

The service is reliable and the online multiplayer is usually fun (it depends on the game). It also definitely helps that most of my friends are on Xbox Live.

Kinect

The Kinect is an innovative motion-capture controller that allows players to control the characters without touching any buttons. It's definitely worth trying and is a different feeling than the Wii or the Move. It works great for the Kinect Sports games (especially soccer).

Exclusive Games

The list of exclusive games for the Xbox 360 includes huge titles like the Halo series and the Gears of War series. These two game titles would definitely have me shelling out the cash for an Xbox 360.

Cons

RROD

The Red Ring of Death (see Definitions), aside from being a technical issue, is a symbol of the one major problem from which the Xbox still suffers. Something about the raw power of the Xbox means that all of the tiny parts inside have a hard time holding together, and as a result the Xbox is seriously prone to hardware failures.

The vast majority of users who own an Xbox will be able to tell you of at least one RRoD they have personally experienced. I've experienced one, I have a friend who's experienced at least two, and many others who have been left with a steaming pile of junk instead of a beautiful, powerful game machine.

From what I've researched, the issue seems to come from heat management. The Xbox 360 is a powerful machine and generates a lot of heat, but also tries to be relatively quiet with its fans and heat sinks. It doesn't really work, and the Xbox will be prone to overheating. Adding a fan to my Xbox has seemed to solve the issue for me, but I'm always on-edge after that first experience.

Xbox Live Annual Fee and Advertising

The advantages that the Xbox Live brings comes with a price in the form of an annual fee. The fee isn't particularly expensive considering the benefits that come with it, but I've always wondered whether or not it was worth the cost.

The other problem is that after paying the annual fee, the player is subject to seeing additional ads that, usually, are completely irrelevant to gaming. It definitely detracts from the experience, especially considering how expensive the annual fee is already.

Microsoft Points

When players want to pay for downloadable content off of Xbox Live, they have to convert real money into Xbox Live points. This may not seem like an issue, but it allows Microsoft to tightly control the perceived and actual value of the points. It also means that unspent points cannot be converted back to real dollars.